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Antofagasta Q1 copper output up; Nyrstar Q1 revenues fall on weak zinc prices; China steel sector may swing to FY'16 profit

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020


Antofagasta Q1 copper output up; Nyrstar Q1 revenues fall on weak zinc prices; China steel sector may swing to FY'16 profit

TOP NEWS

Antofagasta Q1 copper output up YOY

Antofagasta Plc'scopper output for the first quarter wentup 7.3% year over year to 157,100 tonnes, buoyed by first full quarterproduction from Zaldivarand higher output from Antucoya.The number was offset by lower production at Centinela Cathodes due to declining grades and no contributionfrom Michilla, whichis on care and maintenance. Gold production went down 1.2% to 56,700 ounces comparedto the corresponding quarter last year due to higher gold recoveries at Centinela.Meanwhile, molybdenum fell 19% to 1,700 tonnes from 2,100 tonnes year on year becauseof lower grades.

Nyrstar NV'sfirst quarter revenues fell by 18%year on year to €645 million, while EBITDA dropped 46% to €37 million, primarilydue to a 19% decrease in average zinc prices during the period.

Chinesesteel sector may swing to profit this year

The China Iron & Steel Association said the local steel industrymay swingback to profit this year, or narrow losses to about 10 billion Chinese yuan,as lower supply has spurred an increase in both demand and domestic prices, BloombergNews wrote. Losses in the mills core business last year totaled over 100 billionyuan, which the association said was the worst year ever.

DIVERSIFIED

* Antofagasta Plc'scopper output for the first quarter wentup 7.3% year over year to 157,100 tonnes, buoyed by first full quarterproduction from Zaldivarand higher output from Antucoya.The number was offset by lower production at Centinela Cathodes due to declining grades and no contributionfrom Michilla, whichis on care and maintenance. Gold production went down 1.2% to 56,700 ounces comparedto the corresponding quarter last year due to higher gold recoveries at Centinela.Meanwhile, molybdenum fell 19% to 1,700 tonnes from 2,100 tonnes year on year becauseof lower grades.

* Glencore Plchas priced a CHF250 millionbond, maturing May 2021, at a yield of 2.25%, Reuters reported. This was the firstbond offering since the company was effectively locked out of the debt markets inSeptember 2015 when concerns over its ability to manage borrowings sent its equitiesand bonds into a downward spiral. The mining major opened its books on the sameday, looking to raise a minimum of CHF150 million, with an indicative yield of 2.25%.

BASE METALS

* Nyrstar NV'sfirst quarter revenues fell by 18%year on year to €645 million, while EBITDA dropped 46% to €37 million, primarilydue to a 19% decrease in average zinc prices during the period.

* MetallurgicalCorp. of China Ltd. increasedits net profit attributable to shareholders by 7.19% to 1.37 billion Chinese yuanin the first three months of the year, compared with the same period of 2015, despitea 6.18% fall in its operating income to 42.57 billion yuan. The company's profitresult was aided by a 30.8 million yuan gain from the disposal of non-current assets,90.0 million yuan worth of government subsidies and a 4.4 million yuan saving dueto a debt restructuring.

* Capstone MiningCorp. narrowedits first quarter net loss to US$12.8 million or 3 cents per share from the US$17.4million net loss posted in the same quarter of 2015 as its revenues increased toUS$126.2 million, compared to US$102.9 million in revenues posted in the previouscorresponding period. The company produced more copper in the quarter, at 24,547tonnes, and sales grew to 27,985 tonnes of copper from the 20,082 tonnes sold inthe first quarter of 2015.

* Citing the continuing uncertainty in the base metal sector,Crazy Horse Resources Inc.pulled out from the acquisitionof Solfotara Mining Corp.'sBasay copper projectin the Philippines.

* Sunridge GoldCorp. completedits purchase and sale agreement with Sichuan Road & Bridge Mining InvestmentDevelopment Corp. Ltd. pertaining to the company's 60% interest in the Sunridgeconfirmed payments of US$65 million for the purchase of the shares of Asmara, US$6million for the first installment of the remaining principal of a deferred paymentowed to Eritrean National Mining Corp. and US$950,982 of interest accrued on thedeferred payment to closing by ENAMCO. The payment totaled US$68.6 million.

* Preliminary results of an internal investigation into the tailingsspill at Codelco's in Chile revealedthat the mine's general manager adopted the correct preventive action. However,his instructions, for unknown reasons, were not followed. The investigation willcontinue identifying responsibilities along the chain of command, Codelco said.

* Separately, Diario Financieroreported that despite the recent rain storm that hit central Chile, with the consequentflooding of access tunnels into the ElTeniente division and the risk of ground failure, the expansion theproject continuesto progress while maintaining the safety of its workers.

* The CEO of the Collahuasicopper mine in Chile and president of mining fair Expomin 2016, Jorge Gomez, saidthat despite industry efforts to reduce costs, there is still work to improvereturn to shareholders, even as companies recover their productivity levels, Diario Financiero reported.

* IndependenceGroup NL divested33.8 million shares, or its 4.8% stake, in GoldRoad Resources Ltd. on April 20, just a week before the gold hopefulannounced an institutional placement and entitlement offer to raise A$74 million,The Australian Financial Review's StreetTalk reported.

* Freeport-McMoRanInc. posted a net loss attributable to shareholders of US$4.18 billionfor the first quarter of 2016, wideningfrom US$2.47 billion booked a year earlier. The net loss includes net charges totalingUS$4 billion attributed mainly to a reduction in the carrying value of the company'soil and gas properties, idle rig costs and other items. Excluding these, Freeport'snet loss totaled US$197 million, or 16 cents per share. Meanwhile, first-quarteroperating loss increased year over year to US$3.88 billion from US$2.96 billion,while its revenue fell to US$3.53 billion from US$4.15 billion in the same perioda year ago.

* Separately, Reuters quoted Freeport CEO Richard Adkerson assaying that the company is in "advanceddiscussions" over the sale of number of its copper assets, but refusedto name them.

PRECIOUS METALS

* IAMGOLD Corp.has secured an additional commitmentof US$38 million for its revolving credit facility from Investissement Québec unitRessources Québec. The credit facility, led by National Bank of Canada and DeutscheBank, now totals US$138 million and matures in February 2020.

* Minera YanacochaSRL's postponedUS$5 billion Congagold project in Peru, a joint venture between Newmont Mining Corp. and Compañía de Minas Buenaventura SAA, is no longer sociallyand economically feasible, Reuters reported, citing Buenaventura CEO Roque Benavides.

* Pan AmericanSilver Corp. resolvedthe labor conflict with the union workers at its Manantial Espejo silver mine in Argentina and restartedproduction. The company said it is still on track to achieve its full-year consolidatedproduction forecast of 24.0 million ounces to 25.0 million ounces of silver and175,000 ounces to 185,000 ounces of gold.

* Separately, Pan American Silver exercised its second tranche option to subscribe for additionalcommon shares of Kootenay Silver Inc.in order to maintain a 10% ownership interest in Kootenay's issued and outstandingshares. As a result, Pan American intends to subscribe for 6,793,550 additionalKootenay common shares for an aggregate subscription price of C$1.6 million.

* Gold Road ResourcesLtd. is planning to raiseA$74 million to fund the development of the Gruyere gold project, part of the project in WesternAustralia. An institutional placement of 98 million new shares will raise aroundA$43 million and a 1-for-10 pro rata accelerated nonrenounceable entitlement offerwill raise A$31 million, with each new share priced at 44 cents.

* Azumah ResourcesLtd. acquiredthe high-grade 69,000-ounce Julie West project, which will boost the mining inventoryat its Wa gold projectin Ghana.

* OZ Minerals Ltd.hedged about 60% of therecoverable gold at its ProminentHill stockpile in South Australia at an average price of A$1,713 perounce, amounting to 171,200 ounces that is expected to generate A$293 million ofrevenue from 2018 to 2021.

* Eric Sprott will purchaseanother 16.2 million common shares of NewmarketGold Inc. from Luxor Capital Partners LP and affiliates at US$2.80 pershare for a total US$45.4 million. With the latest purchase, Sprott will own approximately17.9% of the company's issued share capital.

* NuLegacy GoldCorp. said New York-based Tocqueville Gold Fund acquired 19.5 million shares of the company. The purchasewas made at 20 Canadian cents per share through an open market transaction.

* Tombstone ExplorationCorp. received approvalfor exploration and drilling on its mining claims encompassing 400 acres, includingthe area of the Stardust gold mine in Yuma County, Ariz.

* Transition MetalsCorp. signed a binding letter of intent with Aldershot Resources Ltd. to option the Gowgandagold project in Ontario. Under the terms, Aldershot can earn up to a 75% interestin the project.

BULK COMMODITIES

* The China Iron & Steel Association said the local steelindustry may swingback to profit this year, or narrow losses to about 10 billion Chinese yuan,as lower supply has spurred an increase in both demand and domestic prices, BloombergNews wrote. Losses in the mills core business last year totaled over 100 billionyuan, which the association said was the worst year ever.

* According to The Associated Press, environmental groups WestVirginia Highlands Conservancy, West Virginia Rivers Coalition and the West Chapterof the Sierra Club have filedtwo lawsuits in two federal courts to make the West Virginia Department of EnvironmentalProtection treat water pollution at bankrupt coal mines, accusing the state of violatingthe Clean Water Act by allowing excessive amounts of pollutants to be dischargedfrom abandoned coal mines.

* Outokumpu Oyj'sfirst quarter salesfell to €1.39 billion from the €1.77 billion posted in the same period of 2015,while EBITDA dropped to €46 million from €65 million. The company narrowed its netloss in the quarter to €41 million from €45 million a year ago. Stainless steeldeliveries also fell year on year to 610,000 tonnes from 620,000 tonnes, and Outokumpuexpects stainless steel market conditions to continue to be challenging in the secondquarter amid global economic uncertainties and subdued raw material prices.

* Fortescue MetalsGroup Ltd. is paying downa further US$577 million worth of debt, which will reduce the Australian iron oreproducer's interest payments by US$48 million each year. "Today's announcementbrings the amount of debt Fortescue has repurchased in the last 12 months to US$1.7billion, with our total debt repayments in the last two and a half years now exceedingUS$4.8 billion," CFO Stephen Pearce said.

* Coal India Ltd.slashed the price of high-grade coal by about 40%, starting April on an experimentalbasis, as the company's stockpilereached an estimated 58 million tonnes, MiningWeekly wrote citing a company official. According to the senior official, theprice cut could be continued through the current fiscal year if the lower priceshelp reduce the company's existing coal stockpile and ensure higher off-take.

* Meanwhile, the Indian government launched a nationwideprobe into over-invoicing of coal imports and illegal non-banking channel fundstransfer, Mining Weekly reported.

* ArcelorMittalwill redeem on May 20all of its outstanding US$1.4 billion 4.5% notes due Feb. 25, 2017.

* Norsk Hydro ASAposted net income of 2.38 billion Norwegian kroner for the first quarter of 2016,a jump of more than 100%from year-ago results.

* U.S. Steel Corp.booked a net loss of US$340million in the first quarter, compared with a loss of US$75 million reported inthe year-ago period, amid tough market conditions. The figure included supplementalunemployment and severance costs of US$25 million.

* Meanwhile, U.S. Steel filed a complaint with the U.S. International Trade Commission againstmajor Chinese steel producers and distributors over alleged illegal unfair methodsof competition including price fixing, theft of trade secrets and the circumventionof trade duties by false labeling. The complaint also sought to exclude all unfairlytraded Chinese steel products from the U.S. market.

* However, the commerce ministry of China urged the U.S. InternationalTrade Commission to rejectU.S. Steel's complaint as there is "no factual basis" for intellectualproperty disputes over China's steel product exports to the U.S. Instead, the Chineseministry said the two countries should work together to address the sector's overcapacityissues.

* Orbite TechnologiesInc. signed a letter of intent with the Quebec provincial government'sInvestissement Quebec for a total of C$15million in financing. Proceeds will allow the company to quicken developmentwork at its Cap-Chatalumina refinery in Quebec.

* SunCoke EnergyInc. posted a relativelyflat attributable net loss in the first quarter, at US$4.1 million or6 cents per share, though its revenue fell to US$311.1 million from US$324.0 million.The company's US$9.5 million operating income during the period was negatively impactedby a US$10.7 million non-cash impairment charge related to its coal mining business.For the full year, the company expects its domestic coke production to lie between4.0 million tonnes and 4.1 million tonnes.

* According to Reuters, conservation group Coast and Countrylaunched a newchallenge against Adani EnterprisesLtd.'s Carmichaelcoal project in Queensland, asking the state's Supreme Court to review the project'senvironmental approval as the government failed to consider "ecologically sustainabledevelopment" of the project.

* Receivers have been appointedto Mongolian Mining Corp.subsidiary Mongolian Coal Corp. Ltd.after the coking coal producer defaulted on a US$600 million loan. The company receiveda demand from lenders BNP Paribas Singapore and Industrial and Commercial Bank ofChina Ltd. that it immediately repay US$95.4 million worth of 8.875% senior notesdue 2017 still outstanding.

* BrazIron Ltd.entered into a conditional agreement to acquirean 80% interest in privately owned Safety Barriers WA Pty. Ltd., a road safety barriermaker in Western Australia. The company intends to diversify its operations in responseto the global downturn in the commodities sector.

* Ternium SAwidened its net incomeattributable to equity holders to US$94.4 million in the first quarter, from US$68.5million a year earlier. The improved bottom line was largely driven by a substantialreduction in the Luxembourg-based steelmaker's costs and an improvement in the EBITDAmargin.

* Vale SAwill reactivate its potash projectin Argentina's Mendoza province in the medium term, but the mine will annually produceonly 1.5 million tonnes rather than the 4.3 million tonnes initially planned, La Política reported. As a result, the companywill no longer build a railway line to the Atlantic and it has started to sell offrails and other construction equipment.

* The Minas Gerais labor ministry on Tuesday issued23 infractions, at 5,000 Brazilian reais each, against Samarco Mineração SA, as a result of inspections to the November2015 tailings spill at the Samarcoiron ore mine in Brazil. The audit concluded that the environmental disaster isthe result of a combination of structural problems and serious operational failuresdating back to the implementation of the dam in 2008, O Globo reported.

* At a shareholder vote, 97.87% of votes cast were infavor of a debt restructure for AtlasIron Ltd., which will result in the company's lenders securing a 70%-ownershipof the company's shares, The Australian FinancialReview reported. In exchange, the company's Term Loan B debt would be trimmeddown to US$135 million from US$259.3 million, the maturity deferred to April 2021and the interest rate decreased.

* Beijing ShougangCo. Ltd.'s net loss for the first quarter increased to 482.3 million Chinese yuan from the 316.7 millionyuan posted in same quarter of 2015. The wider net loss is in line with its previousguidance of between 450 million yuan and 500 million yuan.

* AK Steel HoldingCorp. reported a significantimprovement in its earnings, posting a first-quarter net loss of US$13.6million, or 8 cents per share, down from a US$306.3 million net loss in the sameperiod of 2015, which included a US$256.3 million charge to write-off the company'sinvestment in Magnetation LLC.

* Japan's JFE HoldingsInc. posted a net income attributable to owners of the parent of ¥33.66billion, or ¥58.36 per share, in fiscal 2015, representing a on a yearly basis. The figure,however, beat the company's earlier forecast of ¥25 billion, or ¥43.35 per share.Net sales for the 12-month period amounted to ¥3.431 trillion, down 10.9% from ayear ago.

* Moody's confirmed the Ba1 corporate family ratings and Ba1-PDprobability of default ratings of three Russian steel/mining companies, , and . At the same time,Moody's upgraded 'CFR to Ba1 from Ba2 and PDR to Ba1-PD from Ba2-PD. The outlook on all the ratingsis negative.

* The British government, which already tabled an offer to enticepotential bidders for Tata Steel Ltd.'stroubled U.K. operations, has urgedthe company to consider accepting the government's financial support to keep itsPort Talbot operations running, the FinancialTimes reported. Meanwhile, a source close to Tata Steel toldThe Guardian that the company hasnot ruled out keeping its U.K. business, including the Port Talbot steelworks, andthat the firm is still assessing whether it can afford to keep the unit and returnit to profit, considering that steel prices are rallying and assuming that Chinesedumping can be curtailed.

* JSC Acronexercised a call option to buy backa 9.1% stake in the Talitsky potash project in Russia from Eurasian DevelopmentBank. Following the transaction, the company's stake in project operator willamount to 60.1%.

* Expressing concern over the rise in speculative trading iniron ore futures in China, Goldman Sachs Group said daily iron ore volumes are nowexceedingannual imports. Volumes trades on the Dalian Commodity Exchange in particularincreased by more than 400% from a year ago, Bloomberg News reported.

SPECIALTY

* Macarthur MineralsLtd. appliedfor an additional five exploration licenses in the Pilbara region of Western Australia,expanding its total tenement area to 1,379 square kilometers. The new license applicationscover an area of 185 square kilometers with numerous occurrences of lithium, tantalum,tin and beryl.

* Eugenio Ponce Lerou, brother of the largest controlling shareholderof Sociedad Quimica y Minera de ChileSA, Julio Ponce Lerou, was appointedmember of the SQM board at the shareholders' meeting, Diario Financiero reported. The company's new chairman will be electedbetween April 27 and 28, following the resignation of Juan Antonio Guzman

* Golden SaintResources Ltd. said its three Sierra Leone exploration licenses havebeen renewed. The licensesinclude Baja, Moa, and Tongo.

* Pioneer ResourcesLtd. entered into an option agreement to acquire a 90% interest in the Donnelly lithium project, locatedin Western Australia's Greenbushes mineral field.

* Benton CapitalCorp. acquireda 100% interest in an additional 30 units in two claims at its Wisa Lake lithiumproject in Ontario, through staking.

* Beaufield ResourcesInc. staked76 additional claims, or 4,142 hectares, for potential lithium on its western boundaryat Troilus, Quebec.

INDUSTRY NEWS

* According to South Africa's Solidarity union, more than 29,000jobs in the country's mining sector, as well as 8,000 in the metal and engineeringindustry are atrisk as companies look to cut costs due to the commodity rout, City A.M. reported.

* Environmentalists criticizedNova Scotia's proposed overhaul of mining rules, arguing that such a move is notenough to prevent mining on privately protected lands, Mining.com reported. Thegovernment, however, says the new act will make managing exploration licenses easierand cost effective.

The Daily Dose is updatedas of 7 a.m. New York time, and scans news sources published in Chinese, English,Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some externallinks may require a subscription.